I'd have to say it would be difficult to agree with the author's premises straight across the board, but there's no doubt America is sitting under a debt bubble that dwarfs the one in 1929.
The estimate of a 50% tax liability is probably low. For a person who makes $50K per year, about 30% comes out straight off the top in income tax, social security, medicare, etc.. Where I live sales tax is close to 9%. While that varies from state to state, what doesn't come out as sales tax usually comes out someplace else, for example state income tax. To purchase goods and services, another $4K a year, or an additional 8% of gross wages comes out as state taxes. Assuming ownership of a median priced home and median value vehicle, another $2500 per year is taxed on property and vehicle licenses, or an additional 5%. People who rent often don't view themselves as paying property tax, but the owner of the property certainly does, and that cost is passed on in the rental rates. So, that's 43% of gross income for the parts that are most easily identified.
For the goods and services we purchase, those providing the goods and services also have huge tax liabilities. An employer's share is virtually nickel for nickel for what the wage earner pays in federal taxes for each employee. The business owner then has to pay his own property taxes, either as the property owner or through triple net leases. Then there are business and occupation taxes, labor and industries, licensing fees, etc.. All of those taxes have to be factored into the price of every item sold, or service offered, in order for the business to show a profit at the end of the day. Of the roughly $28K left as disposable income, close to 30% of that is going toward paying the taxes the businesses owe, which translates to an additional $7K or 14%. The grand total for the average American with a $50K per year gross income is around 57%. The wage earner's share is $21,500 and the government's share is $28,500. For the descendants of folks who were miffed about tea taxes, I don't think we've done very well for ourselves.
I don't suppose it matters much whether it's 50% or 57%. The systematic looting of a nation's personal wealth is tyranny anyway you slice it when the number goes much beyond 5-10%.
The truly insane part of the whole situation is what is the point of a program to loot a nation in order to accumulate an imaginary fortune in fiat wealth? Any real correction to true value will cause stocks, bonds and paper money to vanish in a puff of smoke.
The irony of the situation is that the only way for those who have benefited from their ill gotten gains to keep what they have, is to reverse the situation that allowed them to get it in the first place. Slash government spending by around 80% to zero out national debt, then slash taxes by a similar amount so individuals can do the same, while at the same time regulating public companies to a degree that brings equity assets up to market value.
It'll never happen, but at least there's some consolation in knowing the guys who get such a big kick out of being listed in Forbes will be just as broke as the guys flipping burgers at McDonald's once the rubber meets the road. |
